As Summer Ends, Budget Battles Resume

Those of us who live inside the Beltway are enjoying the final few days of summer and slow traffic. However, it will all change next week when Congress returns to session after Labor Day.

Congress is coming back to the unfinished business of passing a continuing resolution (CR), which is needed to keep the government running since Congress has yet to complete any of the eleven appropriations bills that must be passed by Sept. 30. Unfortunately, continuing resolutions have become the new normal in Congress since the appropriations process has lacked any kind of regular order for years. Adding to the challenge of passing a CR — Congress and the president must also address raising the debt ceiling, which Treasury Secretary Jack Lew announced this week will expire in mid-October. At that point, the U.S. Treasury will not have enough revenue to pay for it’s obligated spending, including Social Security benefits, interest on debt and military pay, among other obligations.

The president has stated that he will not negotiate over raising the debt ceiling, whereas House Speaker John Boehner, R-OH, has declared that the president is in “for a whale of a fight” over the debt limit. Republicans continue to demand that any amount raised for the debt ceiling must be offset by cuts in revenue. Many in the Republican conference are also demanding that the leadership use defunding Obamacare as a bargaining chip with the president. However, other Republican Senators, including Sens. John McCain, R-AZ, and Tom Coburn, R-OK, do not believe this is the best approach since it does not have a chance given the Democrat’s control over the Senate and White House.

So, what is likely to happen? Most experts can’t predict, but believe that Republicans will not let the country default on its obligations since they will end up being blamed. Most also believe that Republicans will not allow the government to be shut down; but, a long term budget deal is highly unlikely given how far apart both sides are and what little negotiation has occurred at this point.

As always, AGA is following the budget process closely since Medicare cuts could be on the table if a larger budget deal is proposed, which usually means cuts to providers. We are also keeping a close eye on the appropriations/CR process and its impact on NIH funding since a short-term CR will fund these programs at their FY 2013, post-sequestration levels.

Look for more updates on the budget battles and their impact on gastroenterology on the AGA Washington Insider.